Which of the following would we not expect if government policy moves the economy up along a given short-run Phillips curve?
A)Mark gets an increase in his nominal wage.
B)Bob gets more job offers.
C)Susan reduces prices at her pizza restaurant.
D)Tom reads that the central bank recently raised the money supply

Question

Quizplus · Accepted Answer

If government policy moves the economy up along a given short-run Phillips curve, there would be an increase in aggregate demand which would lead to higher prices. Therefore, we would not expect Susan to reduce prices at her pizza restaurant. The other options (A, B, and D) are all possible outcomes of such a policy.

Which of the Following Would We Not Expect If Government